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North Korea fires again, pound rallies, and bitcoin falls. Here are some of the things people in markets are talking about today.
North Korea fired an intermediate-range missile that passed over Japan before crashing into the Pacific after traveling far enough to put the U.S. territory of Guam in range. The launch, which happened at about 7 a.m. Tokyo time, caused warnings to be broadcast on Japanese TV. The half life to market reaction to Kim Jong Un’s provocations continues to shorten, with the yen taking only three minutes to unwind two-thirds of its initial advance on the news. U.S. President Donald Trump has yet to comment on the latest show of force from North Korea, the first missile test since United Nation sanctions were tightened on the isolated state.
The British pound, which rallied following yesterday’s hawkish hold from the Bank of England, took another leg higher this morning following comments from policy maker Gertjan Vlieghe, regarded as one of the more dovish members of the monetary policy committee, in which he said he may back a rate rise in the near future. Sterling traded as high as $1.3589 after the comments. Elsewhere in the U.K., police declared a terrorist incident following a suspected explosion on London’s underground train network.
Troubled cryptocurrency bitcoin dropped another 11 percent today to trade at $3,065.1550, taking its losses over the past six sessions to over $1,550 per coin. The plunge comes as Chinese regulators continue to up the pressure on the digital currency, and after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon called it a fraud. Technical analysis suggests that the key level for bitcoin is the 100-day moving average of $2,877. Companies that are closely associated with cryptocoin mining are also taking a hit, with Hong Kong-listed PC Partner Group Ltd., which makes graphics cards used in bitcoin mining, tumbling 27 percent since the Chinese crackdown began.
Yesterday’s slip in U.S. stocks from all-time highs and the latest sabre-rattling from North Korea have curbed bullish sentiment. Overnight, the MSCI Asia Pacific Index gained 0.2 percent, while Japan’s Topix index added 0.4 percent as the yen failed to hold its post-missile rally. In Europe, the Stoxx 600 Index was unchanged at 5:50 a.m. Eastern Time, with London’s FTSE 100 Index the biggest loser as the pound rallied. U.S. stock futures were slightly lower, the 10-year Treasury yield was at 2.202 percent and a barrel of West Texas Intermediate for October delivery was trading unchanged at $49.89.
At 8:30 a.m. U.S. retail sales numbers for August are released, with Bloomberg Intelligence suggesting that there will be a Hurricane Harvey effect in the numbers, which are expected to increase 0.1 percent on the month. Industrial production data for August are published at 9:15 a.m., with 0.1 percent growth also expected. European finance ministers begin a two-day meeting in Tallinn, Estonia today, with the focus on further strengthening the bloc.
What we've been reading
This is what's caught our eye over the last 24 hours.
- U.S. equities go back on the menu with biggest inflows in 13 weeks.
- Hugh Hendry closes hedge fund after 15 years as losses mount.
- Tillerson says Iran ‘clearly in default’ of nuclear deal’s terms.
- Facebook removes advertiser ability to target ‘Jew haters.’
- Vegan hip-hop dadaist? You’re spoiled for choice in German vote.
- Martin Shkreli’s $2 million Wu-Tang album might not be a Wu-Tang album.
- Don't mourn the Cassini's demise: Celebrate its discoveries.